Once 'too small' a market, now Wichita's on a national retail roll

Costco’s possible entry into the Wichita market would be the latest prize for the city, which has seen two years of surprising retail growth.

On the surface, it doesn’t make a lot sense: Wichita’s trademark airplane building industry continues to struggle and the departure of a major icon, Boeing, is set for next year. Unemployment is still hovering at just under 8 percent while housing sales have just begun to rebound.

But at the same time, the number of new national retailers coming to town is mounting: two Menard’s stores, Cabela’s, Fresh Market and Chick-fil-A, just to name a few.

The new retailers and restaurants are the product of two decades of momentum and aggressive investment, according to city officials, marketers and businessmen – momentum and investment that has and will continue to transform Wichita, they said, from a struggling secondary market into an attractive home with a regional market of more than 1 million people for national retailers.

“Clearly there is an increased interest in Wichita on the part of the national retail chains,” said Allen Bell, the city’s urban development director.

“Part of that is that the expansion strategies of national retailers have changed, and they are now more interested in mid-sized markets. Part of it is that Wichita has proven itself to be a more dynamic retail market than its size would imply.

“We have George Laham and Bradley Fair to thank for that.”

Cindy Claycomb, a marketing professor at Wichita State University, said the change in those expansion strategies is driven by market saturation: Many national retailers have already landed “where it’s easy to be successful,” she said.

“Then, they all tend to look around and see that others in the country will buy their products,” she said. “Bradley Fair has been very successful, and all that started with one national retailer coming to Wichita and realizing that our demographic actually meets their demographic. It grows from there.”

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In the first half of the 1990s, Wichita wasn’t attractive to national retailers seeking a sure bet, said Bell and Laham, president of Wichita’s Laham Development.

“I remember in the mid-1990s trying to interest Starbucks in coming to Wichita,” Bell said. “The response was that Wichita was too small. Now we have several Starbucks.”

Success – first one national brand, then others – drives that momentum, Laham said.

“Besides a big box like a Wal-Mart or a Target, retailers typically went to the malls here prior to 1990,” Laham said. “In the late 1980s and the early 1990s, I remember going to the annual shopping center convention and talking about bringing national retailers here. It was difficult to get anyone’s attention.”

But in 1992, the success of Laham’s Bradley Fair and its eclectic collection of local speciality retailers got the attention of Talbot’s, a leading national retailer of women’s shoes and apparel. That started the momentum, Laham said, as Gap and Banana Republic followed.

“The success of those early retailers in a market of this size is what has created the succession of speciality retailers coming to Wichita,” Laham said.

That success was interrupted a bit by the recession, but Laham said retailers and restaurateurs are poised to move again as the national economy improves.

“The national retailers all share and compare information, and if a new retailer comes to Wichita ... it’s because of location,” he said. “About 98 percent of the time, they’ll come into a specific location or they’re headed to another town.”

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Costco fans shouldn’t lose patience if the store doesn’t make an immediate announcement. It doesn’t mean a lack of interest in Wichita, just a lack of interest in current options.

“On the average, from when the retailers start talking seriously to us to the day they open, the average is three years,” Laham said.

Company officials said they have no immediate plans to open one of their membership warehouses, which sell brand-name merchandise, here. But sources told The Eagle a deal is close enough that a 2013 opening is a possibility.

Another key factor in Wichita’s recent retail resurgence is when companies think the best economic time is to expand. That was the driver behind fast-food giant Chick-fil-A’s decision to build on Wichita’s east side, a decision so successful in the early-going that a west-side store is moving along quickly for a July opening.

“It’s a lot like stocks,” said Brad Fuller, the owner and operator of the east-side Chick-fil-A at 7990 E. Central. “We don’t look for necessarily short-term gains, but long-term investments and buy low, real estate-wise and investment-wise.

“It was a great time to do this, and if we had to build the brand here, now was the right time to do it.”

Right enough, Fuller said, that sales are 2.5 times initial projections.

“It’s been interesting,” he said.

Cabela’s CEO Tommy Millner said his company’s Wichita store, which opened last month, has had the same reaction Kansas customers.

“Kansans are among our most loyal customers – which became increasingly clear after we opened the Kansas City location in 2002 – so we wanted to extend our footprint across the state,” Millner said. “One visit to Wichita was enough for us to say, ‘This is a place we have to be.’

“We see the Regency Lakes Shopping Center as a retail destination on the rise, now and well into the future, which ultimately is great for Wichita’s economy.”

That kind of optimism from national retailers is a credit to Wichitans and their neighbors, Laham said.

“It says so much for Wichita, and the appetite of the people in Wichita for speciality retail shops and restaurants,” Laham said. “I don’t see that wavering.”